The Pensions Board has "put the knife into the back of defined-benefit pensions", Grafton Group finance director Colm O'Nuallain complained.

He spoke as Grafton, which released strong full-year results yesterday, said its net pension deficit ballooned to almost €63m last year, from €33.5m.

"The deficit has risen very dramatically because of the way the Pension Board insists that you value your pension deficits, which is very onerous," said Mr O'Nuallain.

"I have no hesitation in saying that I fully blame the Irish Pensions Board and the approach that they take for actually killing, for putting the knife into the back of defined-benefit pensions."

Most companies are doing away with defined-benefit pension schemes , which are proving too costly to maintain, especially when deficits have to be plugged.

Mr O'Nuallain, who's retiring at the end of this year from Grafton, insisted that the Pension Board's "raison d'etre for existing is to protect pensions" but instead defined-benefit schemes are being killed off.

He said being forced to discount liabilities back at corporate bond rates has been the main factor in deficits growing. "You're discounting your liabilities back at between 2pc and 4pc and that's what kills it."

Negotiations

Grafton is currently in detailed negotiations with the trustee of a pension scheme with 2,500 active members – about 2,000 of them in Ireland and 500 in the UK – to address the deficit. Grafton is willing to inject a "substantial sum" into the scheme. The Irish Independent revealed the negotiations back in January.

Grafton Group shares jumped over 3pc at one stage yesterday as it said underlying operating profit jumped 33pc to €72.9m in 2012.

The shares pared gains later. The company had predicted a figure of at least €70m. Revenue rose by 6pc, and by 0.6pc on a constant currency basis, to €2.2bn. Chief executive Gavin Slark predicted that a housing recovery in Ireland will be "long and slow".

He also said that the group has continued to eye possible acquisitions in the UK, where it generates about 75pc of its revenue and profits, and Belgium.